Meeker-Magner Co. v. Globe Life Insurance

504 N.E.2d 854, 152 Ill. App. 3d 534, 105 Ill. Dec. 569, 1987 Ill. App. LEXIS 2051
CourtAppellate Court of Illinois
DecidedFebruary 5, 1987
DocketNo. 85—3394
StatusPublished
Cited by1 cases

This text of 504 N.E.2d 854 (Meeker-Magner Co. v. Globe Life Insurance) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Meeker-Magner Co. v. Globe Life Insurance, 504 N.E.2d 854, 152 Ill. App. 3d 534, 105 Ill. Dec. 569, 1987 Ill. App. LEXIS 2051 (Ill. Ct. App. 1987).

Opinion

JUSTICE LINN

delivered the opinion of the court:

Plaintiff, Meeker-Magner Company (Meeker-Magner), brings this appeal seeking reversal of a trial court’s order dismissing counts I and III of its three-count complaint.1 Meeker-Magner filed its complaint after defendant Globe Life Insurance Company (Globe) served Meeker-Magner with notice that a lease between Meeker-Magner and Globe was terminated.

In count I of its complaint, Meeker-Magner seeks recision of the lease that it entered into with Globe. In count III, Meeker-Magner alleges that Globe breached the lease by terminating it and that as a result, Globe is obligated by the lease to pay Meeker-Magner $100,000 in stipulated damages.

Globe moved to dismiss counts I and III of Meeker-Magner’s complaint contending that paragraph 18(e) of the lease permits Globe to terminate the lease if Globe enters into a land sale contract to sell the building in which Meeker-Magner rented office space.

Following a hearing on the matter, the trial court agreed with Globe finding that Globe was acting within its rights under paragraph 18(e) when it terminated the lease. Accordingly, the trial court dismissed counts I and III of Meeker-Magner’s complaint.

Meeker-Magner now brings this appeal asserting: (1) that the language of the lease is ambiguous and that resort to the rules of contract construction establishes that Meeker-Magner is entitled to $100,000 for Globe’s termination of the lease, and/or (2) that Globe’s failure to pay Meeker-Magner the $100,000 in stipulated damages constitutes substantial nonperformance of the lease by Globe thereby entitling Meeker-Magner to recision of the lease.

We affirm.

Background

This appeal is before us following the trial court’s ruling that counts I and III of Meeker-Magner’s complaint fail to state a cause of action under Illinois law. Accordingly, we must accept as true all of the well-pleaded allegations in counts I and III and must draw all reasonable inferences in Meeker-Magner’s favor. Horwath v. Parker (1979), 72 Ill. App. 3d 128, 390 N.E.2d 72.

Meeker-Magner’s complaint reveals that on September 2, 1980, Globe and Meeker-Magner executed the lease at issue in this appeal. The subject of the lease was a building located at 222 South Prospect Avenue in Park Ridge, Illinois. The lease’s term lasted for five years from September 2, 1980, to September 2, 1985. The following provisions of the lease áre pertinent to this appeal.

Paragraph 18(e) provides:

“The Lessor shall have the right to terminate this lease on the thirtieth day of April in any year if the lessor proposes to sell the building and the land under it ***. Such termination shall become effective and conclusive by notice of the Lessor to the Lessee not less than ninety days prior to the thirtieth day of April fixed in the notice. No money or other consideration shall be payable by the Lessor to the Lessee for this right ***.”

Paragraph 23 of the lease provides:

“At the end of the five-year term, Lessees shall have an option to extend the term of the lease for an additional five-year period, at a rental based on the rates per square foot then charged for comparable space in the same general location. Lessor shall have the right to cancel said option by giving the Lessee nine (9) months notice of intent to cancel the option and by paying Lessee the sum of $100,000.00 within 30 days after notice of cancellation.”

On February 23, 1984, Globe contracted to sell the building to the American Academy of Orthopedic Surgeons (the Academy). Subsequently, on May 17, 1984, Globe sent a notice of termination (pursuant to paragraph 18(e)) to Meeker-Magner. The termination was effective April 30, 1985, and informed Meeker-Magner of the building’s pending sale. The next day, on May 18, 1984, Globe closed the sale of the property and Meeker-Magner was directed to make all future rent payments to the Academy.

In June of 1984, Meeker-Magner demanded payment of $100,000 from Globe. Meeker-Magner claimed that under paragraph 23 of the lease, it was entitled to receive the money. Globe refused to honor Meeker-Magner’s demand.

On September 14, 1980, Meeker-Magner informed Globe that it was seeking a recision of the lease. Meeker-Magner thereafter refused to make any further rent payments and, in October of 1984, vacated the premises. Meeker-Magner then instituted this lawsuit on October 10,1984.

Pursuant to Globe’s motion, the trial court dismissed counts I and III of Meeker-Magner’s complaint. Meeker-Magner now brings this appeal.

Opinion

The resolution of this appeal lies in the interpretation of two provisions (paragraphs 18(e) and 23) contained in the lease executed between Globe and Meeker-Magner. It is well settled that in construing a lease, a court should resort to the general rules of contract construction. Sol K. Graff & Sons v. Leopold (1981), 92 Ill. App. 3d 769, 416 N.E.2d 275; Hoffman v. Clark Street Roadhouse, Ltd. (1979), 79 Ill. App. 3d 41, 398 N.E.2d 238.

The interpretation and legal effect of a contract are questions of law for the court to decide. (Northern Illinois Construction Co. v. Zale (1985), 136 Ill. App. 3d 822, 483 N.E.2d 1013.) It is also a question of law as to whether an ambiguity in a contract exists. (Country Service & Supply Co. v. Harris Trust & Savings Bank (1981), 103 Ill. App. 3d 161, 430 N.E.2d 631.) In interpreting a contract, the primary goal of the court is to give effect to the intent of the parties and in so doing, the court should view the contract as a whole. (Braeside Realty Trust v. Cimino (1985), 133 Ill. App. 3d 1009, 479 N.E.2d 1031.) Where the terms of a contract are plain and unambiguous, the intent of the parties is to be ascertained solely from the words employed in the contract. (Puckett v. Oelze (1985), 134 Ill. App. 3d 1020, 481 N.E.2d 867.) The terms of a contract should be given their natural and ordinary meaning (W. H. Lyman Construction Co. v. Village of Gurnee (1985), 131 Ill. App. 3d 87, 475 N.E.2d 273), and a court should construe a contract to give effect to every portion thereof for the law prefers that construction which renders the agreement legal rather than void (Schiro v. W. E. Gould & Co. (1960), 18 Ill. 2d 538, 165 N.E.2d 286).

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504 N.E.2d 854, 152 Ill. App. 3d 534, 105 Ill. Dec. 569, 1987 Ill. App. LEXIS 2051, Counsel Stack Legal Research, https://law.counselstack.com/opinion/meeker-magner-co-v-globe-life-insurance-illappct-1987.